According to recent reports and projections, the Niagara Region housing market is set to repeat in 2022 the double-digit price increases it saw throughout 2021. Inventory was at all-time lows and properties started to see six-figure over asking sales!
What does that mean for the real estate investor already there or those looking to get away from more expensive markets in the GTA?
Meaghan Lazenby of eXp Realty shares her insights and market data and where the best real estate investing opportunities may lie in the Niagara Region.
Daniel: I was traveling today and somewhere in my paperwork, I had a little bio for you and then five minutes before we got on, I realized I didn't have it. What am I going to say about Megan for a long time? And then I thought, okay, what's going to help me? Why don't I use the letters that are in her name and what's the first thing that comes to me with the letters of her names.
M-Mother, you are a mom, right? Everything that it means to be a mom, you carry it into your business with your clients. I know because I've seen it. E-Effervescent, people will realize that in the next 20 minutes, but you are bubbly. You're fun to be around. I don't necessarily mean when you drink wine and we go on tour. You're just fun to deal with. A-Accessible, even though you're a mom and you're very busy and you're professional and everything else you're accessible. If I call Meaghan, she will return my phone calls promptly, not for days later. G-Giving, guess what? You're a mom, so that says it all. You're giving, you're going to give advice, you're going to give your time. You're going to give solutions to problems, etcetera. H-You are a straight shooter. I know that from you and A-Accomplished, you're an accomplished realtor, your stuff, the process, your forms actually teach other realtors how to do it. And N- No nonsense, you are one of the most no-nonsense person, I've ever met.
Meaghan, or I should say not Megan people. If you're looking to buy or sell in Burlington, Stony Creek, Niagara, St. Catharines, Welland, pretty much the whole Niagara Peninsula or sell. And you want somebody who is going to take care of you, call Meaghan. That's it. Hi, Meaghan, how are you doing?
Meaghan: I'm just fabulous. Thank you. That was such an amazing intro. You're making me blush Daniel.
Daniel: It's true, there was not one word there that I said that was not true. I know you have a presentation ready for us. So, rather than me asking you a bunch of questions, I'll watch you do your presentation and then I'll come back and I might ask you some specific questions.
Meaghan: That sounds great. Thank you so much for having me. As Daniel mentioned, I'm a realtor and I'm actually specifically an investor focused realtor. Just to give you a little bit about myself, I started investing in real estate right out of university and while I worked in the corporate world, I got my real estate license and investing in real estate was really a passion and a side hustle for me. Then, once I had my children, once I had my family, the corporate grind really got to me and I really wanted to continue on with what my passion was, which was helping people invest in real estate.
That's when it was about I'm going on my fourth year now. Being a full-time realtor, I do have a business partner and she could not be here tonight, but she and I are definitely a team together. I do want to give you guys just a little summary on what's going on in the market. I'm sure if any of you have been out in the market recently you're competing and you're getting frustrated.
To be honest with you, it's gotten worse. In January, we noticed a significant uptick in demand and in prices. I'll go over a little bit more about that later. Just to go over at a high level, what are some of the factors that are contributing to the super hot market?
First off Sarah, I think you touched on it. There's really low inventory of properties. The average property in Niagara right now is sitting on that market for only 22 days. Whereas normally it would be in between 30 and 40 days. There has been a lot of uncertainty due to the pandemic. Some businesses are doing very well, others are not doing so well.
You're seeing people and investors specifically flock to secure their money in hard assets. Anyone who has owned real estate say for the last 5 or 10 years, not even a year, you've made a lot of money because the market went up 20% last year. They're really rich in equity. What we're finding is if you've owned a couple of properties for a couple of years, you have all this equity that you're refinancing and taking to then go to other properties.
The record low interest rates has made it very affordable to qualify for higher mortgages. Who knows maybe that will change in the near future. I know they're talking about here in March, specific to Niagara. Something I noticed because when I first started into real estate four years ago, that was when Ford came into power and they extended the Go Train Service to Niagara Falls and St. Catharines.
That was one of the key times when we really saw quite a big uptick in pricing for the Niagara region. This is really just to say that real estate is just such a trusted us in class. Okay. It helps people protect, preserve, and grow their wealth. It's really simple and easy to understand.
You have revenue, you have expenses and you hold it over time. Someone else pays your mortgage. It gets very simple and easy to understand for people. It just allows people to be empowered. I do a lot of coaching and a lot of helping of novice investors and it's just so easy to help explain how it works.
Just to get into a little bit about Niagara specifically. This chart on the left, I took from my board. I'm part of the Hamilton, Burlington board and we share with Niagara. I have access to all their data. I just wanted to share some really high level kinds of what we've seen over the past. This is like a 10 year graph, but essentially there's been about a 150% return, like increase in price, I should say. In the average price of a house in the Niagara region.
You saw a bit of an uptick here when we're 2017 through to 2020, and then you see when the pandemic hits, you see this huge spike. All to say is really the average price of a home hit like $775,000 in January. That's up from literally like $680,000 in December. When I tell you there was a huge explosion in January? Like you're seeing it right here. For those of you who aren't necessarily in Niagara who know the area there's like four main cities.
St. Catharines is the largest. It's average price is about 800,000 Niagara Falls, which everyone knows are the seven wonders of the world. Similar pricing as St. Catharines, Welland has come up significantly and I think, Jon touched on it where their city is very open to development and there are a lot easier to work with. The pricing there has come up significantly in the average host, there is 700,000 and also Port Colborne.
I have some houses that we've put in offers on and we've seen the growth. Anyways, all to say prices basically from January last year to January this year in all of the Niagara region are up 21%. Very good for all of us who own real estate in these communities. We're looking into this year, like what's going to happen this year. This is right from the Niagara association of realtors. They're saying it's a simple case of supply and demand.
I have to tell you, I see it out there every day. I have probably put in like maybe six offers for clients in the last four weeks. Every single one of them has been in multiple offers between and there were between 20 and 30 offers on all of those properties. Maybe 13, maybe like 15 but still, and a lot of offers coming in on. Canada is projecting an increase of about 7.5% in housing prices in 2022, but Niagara is expecting higher than that. They're expecting about 10%.
Niagara is a fantastic place to invest despite the fact that it's grown significantly over the past little bit, it's still a fantastic place to invest your money and with all of the growth that you're going to see, it's still a great place to be. Here's where I want to share what we've seen, like ending with our boots on the ground and outselling Niagara. This was a property in Port Colborne. It's a beautiful raised bungalow, all brick ideal for a conversion. Jon would probably say, oh, that's a beauty. It was very dated though. It was right out of the 1970s. It was listed at $550,000.
To be honest with you, I thought it would sell for $660,000 to $700,000. Honestly, it's sold for $926,000. Like I almost fell off my chair, prices that we really have not seen. Here's another one and it's an interesting story because the person who owned this property purchased it from a builder. It's in Welland, it's newer. It's about a year old. Now the person who was selling it had purchased it from a builder and he got it in January of 2021 and he paid $580,000.
In January of this year, he listed it for sale at $799,000. At that point, it's about a year old. The only thing he had done to the property was when he bought it. It had a vacant basement, but he added a basement suite and noted that it was unregistered. It wasn't registered with the city of Welland. It's like what we'd call an in-laws suite and that property again. We had someone offer it. We went in with an offer of $890,000 is a very strong offer for this neighborhood and it sells for $970,000. Our client misses out, but don't worry. We're still going to help this client find a great property.
The next thing I want to touch on is, what we're finding is it's very difficult to help our clients buy properties in this resell market. I'm saying there's low inventory, all those things. Another option we have, and you have as an investor is to look at some pre-construction developments.
In Niagara, like what we see. There are large scale developers in Niagara and they are selling. Of the big ones that you've probably seen if you've been around there are empire homes, for instance. They have a lot of projects in Thorold. And most recently, a couple of years ago, they bought some brownfields in Welland. They have the old John Deere plant in Dane city. It used to be a steel mill rate on our steel manufacturer rate on Welland river in Welland.
There's going to be these huge master plan communities, which really changed the landscape in Welland specifically. Over the next 10 to 15 years by these big developers there's also a trend towards higher density, so you're seeing more condos. I was involved in selling some units in the upper Vista, which is going to be in Welland. There's another one St. Kitts that I'm involved in St. Catharines. It's a stock townhouse. There's some other ones that I've sold as well in Welland, in Niagara falls that are going to be a stock town as well where they were traditionally I'd say products you'd see in larger cities like Mississauga, where there don't have a lot of land.
You're seeing builders build these because low land costs have come up so much that they need to find more ways of getting more people on less land and then finally pre-construction prices. If you thought pre-construction prices were high now, my contacts that really just focus on this area specifically are saying, you are going to see prices go up 30% to 35%, and it's really because the land costs have gone up so much. Development fees are a lot higher than they used to be.
The cities are putting them up every year and to your point, Jon I know you were referencing the $35,000 in additional fees and then you have this higher input costs. Like concrete and lumber and all of the labor and all of that, like inflation is here. We know that is going to have an impact on prices too but what we do love about the pre-construction is, there's not a bidding war. It's yes, there's many of you coming to the table to buy, but like everyone gets the chance to buy.
For the most part, depending on where you're buying. I just wanted to share an example of how we've seen our clients profit from preconception because I'm not sure if many of you guys out there watching have seen this, have partaken in this strategy. I thought this might be helpful. This was a project that our teams sold off plans back in 2019. It was like $550,000 basically. The person could buy it off of pre-construction plans for only $20,000 which is great.
They waited the time period for it to be built. They took possession of it in January of 2021. This investor ended up selling it. My personal investor ended up buying one of the units and it sold for $710,000 this past July. I want to tell you right now, I could easily, like I sold one down the road from this one for $800,000 in November.
That just shows you the price appreciation of these properties. This one is right in St. Catharines, it's rate in Western hill neighborhood, which is right next to where the proposed New Go Train station will be. It's in an area that's seeing lots of redevelopment. The next thing I just wanted to share was that I do have access and we do sell a lot of pre-construction. We do have a really beautiful townhouse pre-construction project that we have access to in central St. Catharines phase two is going to open up very shortly.
If anyone is interested in that, we have access to that and because we are investor focused realtors, we do have access to we'll call it two unit properties. You can buy a resale property, hire a company like blackjack contracting to do a conversion for you, or we do have some smaller builders we work with who do build these. You can buy them already made. We have two available in Welland that are closing in the summer probably in June. We do have one available in St. Catharines as well, that will close in the fall that we're selling right now.
It's really, we offer creative solutions for our clients and because we want to see you guys achieve profitable returns. Whether it's like the reserve, wait and assign strategy that I know The REITE Club has been focusing on, we have pre-construction to meet that market. We do have lots of off market opportunities. Whether it's these new builds that we have, whether it's some assignments, we have sold a couple of developments. We have those assignments and just the coaching that we offer.
Here's my contact information. Feel free to follow me on Instagram. I am active there and feel free to reach out via text or email if you want to connect with me. Thank you so much.
That was great and it's always exciting when we hear off market opportunities.
Daniel: I have a question for you, Meaghan. Is it possible right now for somebody to buy something in the Niagara area and still cash flow?
Meaghan: Yes, for instance, like I just spoke to a client last night. He bought a two unit property in Western hill in St. Catharines. He rented out the upper unit for $2,450 and he rented out his basement one bedroom for $1,500 cash flowing over $600 a month.
Daniel: Wow. Hard to do that in Mississauga or Richmond Hill. Thank you very much. I live in Niagara on the lake, so I am totally aware of what you're talking about. Even the houses that we own and pre-construction. It's just absolutely going crazy. It's in a way it's fun to see that the numbers go up, month after month. But not if you're a young family and you're trying to buy all that's not so much fun for them. Okay. Thanks again, Meaghan.
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